By Directors, Officers and Employees of Hellaby Holdings Limited and its Subsidiaries ( The Company )

Transcription

1 Code of Conduct for Securities Trading ( Code ) By Directors, Officers and Employees of Hellaby Holdings Limited and its Subsidiaries ( The Company ) Approved by the Board: 10 May Introduction Insider trading is regulated in New Zealand by the Securities Markets Act 1988 (the Securities Legislation). The basic principle behind the Securities Legislation is to impose liability upon persons who have non-public information concerning a public company that, if it were generally available to the market, would have a material effect on the price of its securities (in this Code price sensitive or material information ) where those persons: Trade in the Company s securities, or Advise or encourage other persons, directly or indirectly, to trade or hold the Company s securities, or Disclose the information to others knowing, or where the persons ought reasonably to know, that the other persons might trade in or hold, their securities in the Company, before that information is published or is otherwise reflected in the market prices. This Code has been adopted by the Company to regulate trading in the Company s securities by persons with non-public price sensitive information concerning the Company and other improper use of that information. This Code is intended to explain the impact of the Securities Legislation on the Company s directors, officers and employees and to outline a procedure which directors, officers and employees must use to buy or sell the Company s securities. The requirements imposed by this Code are separate from, and are in addition to, the legal prohibitions on insider trading. Compliance with the procedures in this Code and approval of a trade by the Company does not provide a safe harbour defence to a claim against you for insider trading under the Securities Legislation. Therefore it is important that you have a good understanding of your obligations. Anyone who breaches the new insider trading law will be liable for substantial civil penalties. The maximum penalty in any case will be the greater of: The consideration paid for the shares; Three times any profit made or loss avoided; or NZD 1,000,000. In addition, knowingly breaching this law will be a criminal offence. Anyone convicted could face up to 5 years imprisonment or a fine of up to NZD300,000 for an individual and NZD1,000,000 for a body corporate. 1

2 A claim against you for a breach of the insider trading law will also expose you to substantial legal costs relating to your defence. Strict compliance with this Code is a condition of employment with the Hellaby group. A breach of this Code will result in disciplinary action being taken against you, up to and including termination of your employment. The Company may monitor the trading of directors, officers and employees as part of the administration of this policy. The Hellaby Holdings Board has approved this Code. The Board may approve updates, amendments to and exemptions to this Code from time to time, which may be implemented by written notice to you. If you do not understand any part of this Code, or how it applies to you, you should raise the matter with the Hellaby Holdings Company Secretary. 2. Important Concepts The application of the Securities Legislation is based on a number of key concepts including the following: In order for there to be a liability, the person buying or selling or tipping the Company s shares must hold material information. This is defined as information relating to the Company that is not generally available to the market and which a reasonable person would expect to have a material effect on the price of the Company s securities if it was generally available. Material information can include rumours, matters of supposition, intentions of a person (including the Company) and information which is supposition or insufficiently definite to warrant disclosure to the market under the exceptions (discussed below) to the NZX s continuous disclosure rules, and could include information concerning: - The financial performance of the Company or any of its subsidiaries; - A possible change in the strategic direction of the Company, or any of its subsidiaries; - The introduction of an important new product or service; - A possible acquisition or sale of any assets or company; - The entry into or the likely entry into or termination of material contracts or other business arrangements which are not publicly known; - A possible change in the Company s capital structure; - A change in the historical pattern of dividends; - Senior management changes; - A material legal claim by or against the Company; or - Any other unexpected material liability. 2

3 3. General Principles - Securities includes shares, and debt instruments issued by the Company. Transactions involving either of these instruments are potentially covered by the Securities Legislation Material Information It is illegal for a person who has material information about the Company to: buy or sell the Company s securities; advise or encourage any person to buy or sell or hold the Company s securities; advise or encourage any person to advise or encourage another person to buy, sell or hold the Company s securities; disclose the material information to anyone else, including colleagues, family or friends, knowing (or where that person ought to have known) or believing that the other person is likely to use that information to buy or sell or continue to hold, or advise or encourage someone else to buy or sell or hold, the Company s securities. This means that you should not do any of the above at a time when you are in possession of non-public, material information in relation to the Company s securities. Although the Securities Legislation requires that you know the information you hold is material information, if you ought reasonably to know that, the legislation will still apply. It does not matter how you come to know the material information, and the Securities Legislation applies irrespective of how you came to receive the said information Relationship to the Continuous Disclosure Regime Except in the limited circumstances described below, New Zealand legislation and the NZX Listing Rules require the Company to release immediately to the NZX any material information (as defined above) concerning the Company. As a result of the operation of this continuous disclosure regime, usually all material information about the Company will be generally available to the market. Material information is generally available to the market: immediately upon it being released as an NZX announcement; or if it has been made known in a manner that would, or would likely to, bring it to the attention of persons who commonly invest in the Company s securities and since it was made known a reasonable period has elapsed for the information to be disseminated among those persons; or it is likely that investors that commonly invest in the Company s securities can readily obtain that information, whether by observation, use of expertise, purchase or other means. 3

4 However, there are limited circumstances in which immediate disclosure of material information by the Company is not required by the continuous disclosure regime. In these situations, there may be people with material information who would breach the insider trading prohibition if they dealt in securities at that time or undertook any of the other prohibited acts. Specifically, the NZX Listing Rules do not require disclosure where: a reasonable person would not expect the information to be disclosed; and the information is confidential and its confidentiality is maintained; and one or more of the following applies: - it would be a breach of law to disclose the information; or - the information concerns an incomplete proposal or negotiation (e.g., the Company has not yet executed a heads of agreement); or - the information comprises matters of supposition or is insufficiently definite to warrant disclosure; or - the information is generated for internal management purposes (e.g., internal management accounts or an internal management report); or - the information is a trade secret. Although information that satisfied these conditions does not need to be immediately disclosed under the NZX Listing Rules, it remains material information. If a person deals in the Company s securities at a time when that person is aware of information which, but for a carve-out to the NZX Listing Rules, would need to be disclosed to the market, that person will be in breach of the Securities Legislation. The Company has an obligation to ensure that the information it disseminates to the market is true and not materially misleading, and criminal liability will arise where knowledge of the breach exists, including large fines of up to NZD300,000 for individuals such as directors, officers and employees who are involved and NZD1,000,000 for companies and/or up to 5 years imprisonment. Civil liability may also arise. Under the Securities Legislation if a public issuer breaches its continuous disclosure obligations, the Securities Commission can now impose liability on individuals who aid, abet, counsel or procure a contravention of those obligations or were in any way, directly or indirectly, knowingly concerned in, or a party to, the contravention by any other person and can impose the following penalties: a pecuniary penalty up to a maximum of NZD1,000,000 payable to the Crown; and/or a compensatory order ordering the payment of compensation to a person who has suffered a loss as a result of the breach; and/or a civil remedy order, which includes a range of powers including directions restraining actions such as disposals, issues and allotments of shares, payment of distributions and 4

5 ordering the forfeiture of securities or cancelling agreements for the acquisition or disposal of securities. In the event of a claim by the Commission a person must prove on the balance of probabilities that the person took all steps that were reasonable in the circumstances to ensure that the public issuer complied with the continuous disclosure obligations and after doing so the person believed on reasonable grounds that the public issuer was complying with those obligations. The Commission can also make a declaration of a contravention in relation to a breach of the continuous disclosure provisions, which will act as proof of a contravention for the purposes of any future applications for compensation orders or other civil remedies Disclosure Notice by Directors & Officers In addition, directors and officers of the Company that acquire or dispose of a relevant interest in a security of the Company must disclose that fact within five trading days of the disposal or acquisition to the NZX and in the Company s interest register. That disclosure must be made in the prescribed form. This requirement continues for six months after a person ceases to be a director or officer. Criminal liability, and a fine of up to NZD30,000, will arise where any person fails to make such a disclosure and is aware, or ought reasonably to be aware, of information they are required to disclose. If an employee has any doubts as to whether they are an officer for the purpose of these requirements, whether he or she is acquiring or disposing of a relevant interest or the form of disclosure, he or she should contact the Hellaby Holdings Company Secretary Market Manipulation The Securities Legislation imposes criminal liability on persons who manipulate the market for an issuer s securities, by making materially false or misleading statements knowing, or if the person ought reasonably to have known, that the information is likely to induce a person to trade in the securities or have the effect of increasing, reducing, maintaining, or stabilising the price of those securities. It is also an offence to create a false or misleading appearance of trading with respect to either: the extent of active trading in the securities of any public issuer; or the supply of, demand for, price for trading in, or value of those securities. The person must know or ought to reasonably know that their act or omission will, or is likely to have that effect. Criminal liability can include large fines of up to NZD300,000 for individuals and NZD1,000,000 for companies and/or up to 5 years imprisonment. Civil liability may also arise Confidential Information In addition to the above, you also have a duty of confidentiality to the Company. You must not reveal any confidential information concerning the Hellaby group to a third party unless that party has signed a confidentiality agreement with the Company and you have been authorised 5

6 to disclose the confidential information. You must also not use confidential information in any way which may injure or cause loss to the Company or use confidential information to gain an advantage for yourself. You should ensure that external advisors keep the Company s information confidential. The loss of confidentiality of material non-public information concerning the Company will require the Company to immediately disclose that information to the market, potentially causing significant commercial damage to the Company. 4. Permitted Trading The Board of Hellaby Holdings has determined that in order to minimise the risk of inadvertent breaches of the Securities Legislation and to focus attention on those obligations at the time of any proposed trading in the Company s securities all such persons are required to conduct any such trading in accordance with the requirements of the following procedure. It is important to note that approval by the Company does not amount to a sanction or ratification of any activity that breaches the Securities Legislation Persons covered by Securities Trading Restrictions The trading restrictions apply to: All Hellaby Holdings directors The Hellaby Holdings Chief Executive and all subsidiary Chief Executives/General Managers, Hellaby Holdings management, Trusts and companies controlled by such persons; and Anyone else notified by the Hellaby Holdings Company Secretary 4.2. Trading Restrictions for Restricted Persons Black-out Period Restricted persons are prohibited from trading in any Company securities during the following specific black-out periods: 60 calendar days prior to Hellaby Holdings half-year balance date announcement, until the first trading day after the half year results are released to NZX; and 60 calendar days prior to Hellaby Holdings year end balance date announcement, until the first trading day after the full-year results are released to NZX; and 60 calendar days prior to release of a prospectus for a general public offer of the same class of the Company s securities. Restricted persons are not permitted to trade any of the Company s securities during a black-out period unless the Hellaby Holdings Board provides a specific exemption. 6

7 Please note that if you hold material information you must not trade Restricted Securities at any time regardless of these periods Request to Hellaby Holdings Limited A written request on the approved form (attached) must be made and approved prior to any trading in the Company s securities. The request must be made to the Chairman of Hellaby Holdings. If it is the Chairman making the request, the request must be made to the chairman of the Company s Audit Committee. The Board may delegate to a specified officer the authority to approve share trades by employees below a specified level of seniority. The application must be handed to the Hellaby Holdings Company Secretary who will manage the processing of the application. The Chairman must be reasonably satisfied as to the truth of the statements made in the approved form before approval will be granted. The Chairman may require further information from the applicant to corroborate the statements made. The Company is under no obligation to consent to any trade. In addition, the Company will generally not approve any trades of a short-term nature unless there are exceptional circumstances disclosed to and approved by the Chairman. The approved form requires, amongst other things, that the applicant state that the applicant does not hold material information. It is for the applicant to establish the grounds pursuant to which the required certifications can be made. If you intend to trade in the Company s securities through a trust or nominee company, or if you intend to trade in the name of another person (for example a family member), you must still apply for approval for the trade. The application for approval must include full details of the person or entity purchasing or selling the securities and its relationship to the applicant Timing A trade which has been approved by the Company must occur within 15 NZX trading days after the approval has been given but may only occur whilst each of the certifications and other matters given in the application remain correct. If the Company makes a market announcement of price-sensitive information after the trade has been approved by the Company in accordance with this Code, then if you have not at the time of the announcement already completed that trade you must not complete that trade until at least one trading day (being the next trading day) after the time of the announcement. In particular, if approved by the Company, trades may not be made until one trading day (being the next trading day) after the announcement of the annual results or half-yearly results Noting of Transactions The Board of Hellaby Holdings will be advised by the Hellaby Holdings Company Secretary of securities trading by insiders by the Hellaby Holdings Company Secretary providing a copy of each consent granted by the Chairman at or before the Board meeting next after the consent is given. The Hellaby Holdings Company Secretary will maintain a Register which will record the date and time of receipt of each request received under section 4 of this Code, any matter the 7

8 Board considers appropriate to record, the decision made and the time it was notified and the date of the transaction. If you have any doubts or questions as to compliance with this Code or the Securities Legislation generally, please contact the Hellaby Holdings Company Secretary before entering into any transaction or agreeing to do so or undertaking any other action that may potentially be in breach of this code or the Securities Legislation. 8